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Market moving events and the bitcoin crash

Milestones arrive quickly on Wall Street these days where the Dow Jones closed above 26,000 and S&P 500 better than 2,800 for the first time overnight.

Trump's pro-business reforms, healthy outlook for corporate profits and an expanding global economy have fuelled the rally, and there could be much further to go if this is a classic 'melt-up', typical of late-stage bull markets.

While it's getting harder to make a valuation argument in favour of US stocks, UK domestic equities look cheap in comparison.

A small beat in China's fourth-quarter GDP number removes a potential banana skin. That the Chinese economy registered its first year-on-year growth since 2010, and the fastest growth in two years, is a bullish flag for both the global economy and equity markets.

After yesterday's hostile bid from Melrose (MRO), GKN (GKN) has launched a scathing attack on the turnaround specialist, but expect Melrose to go on a massive charm offensive over the coming weeks.

An offer worth around 430p is almost 50% higher than GKN shares were a month ago, and would likely have taken years to achieve otherwise. That such a large portion of the offer is in Melrose shares does not help, but GKN shareholders must be tempted to take the money now rather than gamble on current management making a success of it.

It's worth noting that, despite several attempts, GKN shares have never managed to make a move above 400p stick. This is their chance.

If a month is a long time in politics, it's an eternity in cryptocurrency land. Peaking at $20,000 just four weeks ago, bitcoin bounced by over $2,000, or 20% just hours after plunging close to $9,000.

A clampdown by regulators risks bringing the crypto party to a bloody end, but there's no guarantee the South Korean and Chinese governments will follow through on threats to ban the practice. Expect further extreme volatility as crypto traders are kept guessing.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.